FABM 2 - ASSIGNMENT

1. What is the adjusting entry for prepaid insurance under the asset method?

• Debit Prepaid Insurance, Credit Insurance Expense

• Debit Insurance Expense, Credit Prepaid Insurance

• Debit Insurance Expense, Credit Cash

• Debit Cash, Credit Insurance Expense

2. How do you adjust unearned revenue using the liability method at year-end?

• Debit Unearned Revenue, Credit Revenue

• Debit Revenue, Credit Unearned Revenue

• Debit Cash, Credit Unearned Revenue

• • Debit Revenue, Credit Cash

3. If a company initially records prepaid rent as an expense, what adjusting entry should be made at year-end to reflect the correct expense?

• Debit Prepaid Rent, Credit Rent Expense

• Debit Rent Expense, Credit Prepaid Rent

• Debit Rent Expense, Credit Cash

• Debit Cash, Credit Rent Expense

How do you adjust a previously recorded prepaid expense under the asset method when some of it has been used?

• Debit Expense, Credit Prepaid Asset

• Debit Prepaid Asset, Credit Expense

• Debit Expense, Credit Cash

• Debit Prepaid Asset, Credit Cash

What accounts are debited and credited when adjusting for unearned revenue using the liability method?

• Debit Cash, Credit Revenue

• Debit Revenue, Credit Unearned Revenue

• Debit Unearned Revenue, Credit Revenue

• Debit Cash, Credit Unearned Revenue

What is the purpose of adjusting entries at the end of an accounting period?

• To close the accounts

• To match revenues and expenses in the proper period

• To record cash transactions only

• To eliminate errors in the trial balance

What is the adjusting entry for supplies used during the period if initially recorded as an asset?

• Debit Supplies Expense, Credit Supplies

• Debit Supplies, Credit Supplies Expense

• Debit Supplies Expense, Credit Cash
  

• Debit Cash, Credit Supplies Expense

For prepaid rent using the asset method, what is the adjusting entry at the end of the period?

• Debit Rent Expense, Credit Cash

• Debit Prepaid Rent, Credit Rent Expense

• Debit Rent Expense, Credit Prepaid Rent

• Debit Prepaid Rent, Credit Cash

How is prepaid insurance adjusted under the expense method at the end of the period?

• Debit Insurance Expense, Credit Prepaid Insurance

• Debit Prepaid Insurance, Credit Insurance Expense

• Debit Cash, Credit Insurance Expense

• Debit Insurance Expense, Credit Cash

If a company provides services that are paid in advance, how should they adjust their books at the end of the period if part of the service has been completed?

• Debit Revenue, Credit Cash

• Debit Unearned Revenue, Credit Revenue

• Debit Cash, Credit Unearned Revenue

• Debit Accounts Receivable, Credit Revenue